Loading...
10 results
Search Results
Now showing 1 - 10 of 10
- Do economic and financial firm's situation affect the quality if financial reports?Publication . Pereira, Cláudia; Cerqueira, António Melo; Brandão, ElísioWe investigate whether firms’ economic and financial situation influence the Quality of their Financial Reports (FRQ). FRQ is fundamental for investors and it affects the international capital movements [Bradshaw et al. (2004)] and Gelos and Wei (2005)]. Following Schipper and Vicent (2003) we use two issues to access earnings quality: abnormal accruals and earnings persistence. For seventeen European countries, we find evidence that the economic performance affects FRQ. Big firms and those with high current earnings exhibit better financial information. These results are robust since they don’t depend on FRQ proxy and we have the same evidence when we estimate regression with economical and financial factors separately or together. About financial situation, it seems not to affect FRQ. However, in high leveraged firms, the capital structure becomes determinant.
- Information environment euality andidiosyncratic return volatility: evidence from UKPublication . Pereira, Cláudia; Cerqueira, AntónioThis paper examines the cross-section relation-ship between the quality of a firm’s information environment and idiosyncratic return volatility, for a sample of UK firms listed on the London Stock Exchange. Using panel data, we find that poor accruals quality is statistically associated with higher firm-specific return volatility. This association also holds for other measures used for the quality of the information environment: dispersion in analysts’ forecasts, the innate component of accruals quality, which reflects the uncertainty about the nature of the firm’s business and the discretionary component of accruals quality, which is related to managerial discretionary choices. More specifically, we find that adding the dispersion in analysts’ forecasts increases the explanatory power for idiosyncratic volatility of the remaining measures of the quality of the information environment. Our results are consistent with the noise-based approach of idiosyncratic volatility. These findings are likely to contribute to the debate on whether idiosyncratic return volatility captures more firm-specific information being impounded into stock prices or essentially reflects noise.
- Does idiosyncratic return volatility capture information or noise?Publication . Pereira, Cláudia; Cerqueira, AntónioThis paper examines the association between earnings management and firm-specific return volatility for a sample of firms listed on the London Stock Exchange. Identifying the determinants of idiosyncratic volatility has been a topical issue since the Campbell et al. (2001) study which documents a noticeable increase in average firm-level volatility across time. Using panel data, we find that poor information environments resulting from earnings management is associated with higher firm-specific return volatility. This finding is consistent with the noise-based approach of firm-specific return volatility. In addition we provide empirical evidence that such association gets stronger when combining accruals quality and the dispersion in analysts’ forecast to describe a poor information environment. These findings are likely to contribute to the debate on whether firm-specific return volatility captures more firm-specific information being impounded in stock prices or essentially reflects noise.
- Does earnings management affect idiosyncratic volatilityPublication . Pereira, Cláudia; Cerqueira, AntónioThis paper examines the association between earnings management and firm-specific return volatility for a sample of firms listed on the London Stock Exchange. Identifying the determinants of idiosyncratic volatility has been a topical issue since the Campbell et al. (2001) study which documents a noticeable increase in average firm-level volatility across time. Using panel data, we find that poor information environments resulting from earnings management is associated with higher firm-specific return volatility. This finding is consistent with the noise-based approach of firm-specific return volatility. In addition we provide empirical evidence that such association gets stronger when combining accruals quality and the dispersion in analysts’ forecast to describe a poor information environment. Furthermore, we find that poor information environment, leverage and the intensity of information disclosure tend to increase idiosyncratic return volatility, while older, more profitable and larger firms tend exhibit lower levels of idiosyncratic volatility. These results are likely to contribute to the debate on whether firm-specific return volatility captures more firm-specific information being impounded in stock prices or essentially reflects noise.
- O Impacto da dimensão e da estrutura de capitais na qualidade das demonstrações financeirasPublication . Pereira, Cláudia; Brandão, Elísio; Cerqueira, António MeloNeste artigo, os efeitos da dimensão e do nível de endividamento sobre a qualidade das Demonstrações Financeiras (DF) são analisados para as empresas portuguesas. Para estimar a qualidade das DF recorremos a duas abordagens: as Necessidades de Fundo de Maneio (NFM) anormais e a Persistência dos Resultados, as quais foram referidas por Schipper e Vicent (2003). A evidência empírica mostra-nos que a dimensão determina a qualidade da informação financeira e que esta relação é positiva, ou seja, as empresas maiores tendem a apresentar melhor informação. Assim as pequenas empresas carecem de mecanismos que garantam uma maior qualidade das DF. Contudo, este resultado só é estatisticamente significativo para uma das duas abordagens seguidas. Adicionalmente, a relação entre a estrutura de capitais e a qualidade da demonstração financeira não é muito consistente.
- The effect of economic conditions on accounting conservatism under IFRS in EuropePublication . Cerqueira, António; Pereira, CláudiaWe analyse in detail conservative accounting practices in seventeen European countries, taking into account institutional factors. In addition, we examine the impact of IFRS adoption and the influence of changes in economic conditions on conditional conservatism. Specifically, we study the level of accounting conservatism before and after IFRS adoption detailing for the pre and crisis period and post-crisis period surrounding the 2007/2008 financial crisis. Our findings are consistent with a conservative accounting practice in Europe as a whole and in each country individually. Besides, opposite to that expected, the results provide evidence of more conservative accounting practice in Anglo-Saxon countries, but we find no significant differences in conservatism in Nordic countries. Another finding is a significant decrease in the level of conservatism after IFRS adoption. Regarding the joint impact of IFRS adoption and economic conditions, we find a decrease in conservatism in the pre and crisis period, followed by a substantial increase in the post-crisis period. Our results seem to be in line with the positive accounting theory when suggesting that conservatism plays a fundamental role as corporate governance and efficient contracting mechanism between managers and other stakeholders of the firm. Furthermore, the results suggest that the flexibility provided by IFRS allows adjusting the level of conservatism when economic conditions change.
- Accounting accruals and information asymmetry in EuropePublication . Cerqueira, António; Pereira, CláudiaWe investigate whether the positive relation between accounting accruals and information asymmetry documented for U.S. stock markets also holds for European markets, considered as a whole and at the country level. This research is relevant because this relation is likely to be affected by differences in accounting standards used by companies for financial reporting, in the traditional use of the banking system or capital markets for firm financing, in legal systems and cultural environment. We find that in European stock markets discretionary accruals are positively related with the Corwin and Schultz high-low spread estimator used as a proxy for information asymmetry. Our results suggest that the earnings management component of accruals outweighs the informational component, but the significance of the relation varies across countries. Further, such association tends to be stronger for firms with the highest levels of positive discretionary accruals. Consistent with the evidence provided by the authors, our results also suggest that the high-low spread estimator is more efficient than the closing bid-ask spread when analysing the impact of information quality on information asymmetry.
- The effect of Financial Reports’ Quality on Firm’s PerformancePublication . Pereira, Cláudia; Cerqueira, António Melo; Brandão, ElísioWe analyse whether the quality of firms’ Financial Reports (FRQ) produces any effect on their performance. Bradshaw et al. (2004) and Gelos and Wei (2005) call attention to the fact that the international capital movements is affected by FRQ. Following Schipper and Vicent (2003) we use the abnormal accruals to access earnings quality. For seventeen European countries, we found evidence that FRQ produces a positive impact on firm’s performance. This finding indicates that mangers are not opportunists and tends to make decisions to defend the firm’s best interests. This result is robust since it does not depend on the accounting firms’ performance proxy (ROA/ROE). In addition, it is also consistent when we use data in time series and in cross-sectional and when we estimate regression with lagged or the current year information about abnormal accruals.
- Assessing Earnings Management in European Publicly Traded FirmsPublication . Cerqueira, António; Pereira, CláudiaWe investigate if investors may benefit from using the accruals quality measure to assess the level of earnings management exercised by firms when preparing their accounting statements. More earnings management is expected to be associated with high information asymmetry among stock market participants because it makes earnings information less precise, thus providing an information advantage to informed investors relative to liquidity traders. Our results based on a sample of European publicly traded firms are consistent with a positive association between earnings management and information asymmetry. However, given some previous studies suggesting that accruals based measures may be noisy indicators of earnings management we further develop and test a method to enhance the performance of accruals quality in detecting earnings management
- Transition to the revised OHADA law on accounting and financial reporting: corporate perceptions of costs and benefitsPublication . Fossung, Micheal Forzeh; Ntoung, Lious Agbor Tabot; Santos De Oliveira, Helena Maria; Pereira, Cláudia; Bastos, Susana; Pimentel, Liliana MarquesThis paper examines the ongoing transition to the revised Organisation for the Harmonisation of Business Law in Africa Act on Accounting and Financial Reporting for companies in general and to the International Financial Reporting Standards for listed and group companies with a particular focus on recent institutional developments and corporate concerns. The study used 80 professional accountants, most of whom were members of the Institute of Chartered Accountants of Cameroon and academics. Using the descriptive statistics, the study shows that the transition to the revised OHADA brings about a high level of comparability and transparency of the financial statements, that the International Financial Reporting Standards cannot be implemented in Cameroon (but not fully), and that the benefit of the transition exceeds the cost.